Ask Steve: What Were 2008’s Hottest SMB Debuts?

This time of year everyone asks me to highlight the most important SMB-related offerings that came to market in 2008 that will have major impact in 2009 and beyond. To make my top technology list, the product has to be transformative in nature and rely on the enormous changes in the world’s network fabric. Think you’ve found a hot new offering or technology? Let me know about it, because I think I’ve found some — three of which I discuss below. Stay tuned next month as we return to answering more of your questions in Ask Steve.

FiOS for SMB

It’s a game changer and the MSOs know it: fast Internet, video content (aka TV) and phone service all for around a c-note a month. I predict large addressable market-by-market share shifts in 2009 and beyond as SMBs leave DSL and cable modem service in favor of FiOS.

In past columns, I’ve talked about TV and lightning fast Internet access being winner offerings for SMBs. Twenty five to 45 percent SMBs irrespective of industry segment have CATV in their offices. And they aren’t using it for distance learning and video conferencing. They’re using it to catch the latest episode of “CSI” when they can’t get home on a Thursday evening to watch it. Speed is still the primary buying driver for SMB adoption of broadband Internet access, even more important than price (if you can believe it).

Of course, the biggest drawback to FiOS is its limited availability due to market build. Take a longer-term view of things and you realize that five years from now, SMBs in Verizon territory will be using a solution other SMBs can’t get (for example, those in Denver). And I predict in five years in Verizon territory, SMB broadband market share for non-dedicated services (non T1 customers) will be 70 percent FiOS and 30 percent cable modem-based offering.

Microsoft Response Point for Very Small Businesses

Microsoft told me even I could install this new IP PBX. Microsoft told me the voice recognition software really works. Microsoft told me I would love the blue “magic” button on the phones. As a good analyst I was skeptical. So Microsoft shipped me Quanta’s Syspine version of the Response Point solution, and now I’m a believer. It took me a couple hours to set up, but I assure you there’s no way I could set up a standard IP PBX from any other vendor. The voice recognition and the “magic” button exceeded my expectations.

I gave the Response Point to our IT guy at Yankee Group and he was equally impressed. It took him one hour to set up and another 90 minutes to integrate the IP PBX with Lotus Notes, so he could listen to his voice mail from Lotus Notes as .wav files.

Are there limitations to Response Point? Yes, but it’s early in its product lifecycle. I expect big things from Microsoft offering very small businesses a platform for providing unified communications requiring almost no upfront implementation expenses.

Open for Us All

It’s a four-letter word that’s going to help evolve the mobility industry with innovation and application development. Verizon Wireless, scared by the razzle-dazzle success of AT&T’s partnership with Apple, needed its own Flea Flicker play. And thus was created the idea of “open.” Now, it’s not quite as fabulous as it sounds: Don’t expect complete transparency of the Verizon Wireless network and portability of all devices, applications and services across carriers. That’s a Hail Mary play for another day.

I applaud the wireless industry’s move to be more open. The concept of open allows the creativity spawned by free markets to build applications, applets, wikis, etc. on top of the wireless platform. Fostering openness is a skill exercised by a software company, not a traditional telecommunications company.

T-Mobile, not to be overshadowed by its larger brethren, announced and launched the G1, the first phone with a Google-created OS. Google, the most prominent proponent of openness, continues to create a robust developer community around Android. I’ve personally spoken with half-a-dozen Gen Y-ers who are currently developing novel applications to run on Android. These mobile-enabled applications will end up in the hands of SMB employees who will quickly discover productivity gains from using mobile tools in new ways.

FiOS, Response Point and Open all rely on underlying changes in the world’s connectivity fabric. Catalyzing new applications; integrating voice, data and video media and leveraging services ubiquitously — these are the building blocks for the early 21st century advancement in the technology sector.

What Do SMBs Want?Ask Steve. Send your questions to asksteve@yankeegroup.com. Please include your name, city, state and a phone number where you can be reached. First names and locations only will be published.